Assignments

Question 1

What is the main piece of legislation for assignments?

Answer 1

Landlord and Tenant (Covenants) Act 1995

Question 2

What is the significance of this piece of legislation?

Answer 2

It abolished privity of contract for assignments after 1st January 1996, where landlords could go after previous tenants for rent arrears, even if the lease had been subsequently assigned.

Question 3

What is the significance of the section 19 of the Landlord and Tenant Act 1927?

Answer 3

It makes covenants which permits assignments fully qualified, so the landlord cannot unreasonably withhold consent for an assignment.

Question 4

What is an appropriate time limit for responding to an assignment request?

Answer 4

Usually within 4 weeks of receiving full details of the application to assign.

Question 5

What could you consider reasonable to withhold consent to an assignment?

Answer 5

1. Where the landlord is concerned the assignee is unable to meet the obligations in the lease
2. If the landlord intends to sell and the assignment will diminish the landlords reversion

Question 6

What is the difference between an assignment and a sublet?

Answer 6

1. An assignment transfer the whole legal interest to another party, whereas a subletting is where a subsidiary lease is created.

Question 7

What is an Authorised Guarantee Agreement?

Answer 7

Where the outgoing tenant guarantee’s the performance of the ingoing tenant until the end of the lease.

Question 8

How long does an AGA last?

Answer 8

Until the end of the lease (and any continuation period) or until the lease is assigned again.

Question 9

How would you demand rent from a former tenant who has provided an AGA?

Answer 9

Serve a section 17 notice making a formal claim for the arrears to be paid by the guarantor.

Claim must be made within 6 months of falling due, or the landlord will not be able to insist on the guarantor paying.

Question 10

What can be recovered under a section 17 notice?

Answer 10

1. Rent
2. Service charges
3. Insurance

Question 11

What is a section 19 notice?

Answer 11

Where the guarantor requests an overriding lease, which would convert the assignee into an under tenant of the assignor.

Question 12

What is the effect of an over riding lease?

Answer 12

Allows the assignor to pursue the debt from what is now the under-tenant and to negotiate a surrender or a forfeiture of the under-lease which would allow the assignor to re-use the premises.

Question 13

Can you assign a lease if the lease is silent on alienation?

Answer 13

Yes